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Politics : View from the Center and Left

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To: JohnM who wrote (210918)	12/8/2012 10:51:02 AM
From: Steve Lokness	Read Replies (2) of 541698

<<<< well I hate to disabuse you on that one but he's a fairly mainstream economist>>>>> I agree with you that Krugman is an extremely well educated economist with many awards. I disagree that he is mainstream. That is just not true - in fact almost by definition to win the Nobel requires one to be thinking outside the box. ...........But education and awards does not rule the day when forced to play by the rules of politics. That,s where Krugman falls down. He might be a wiz at economic theory, but because he doesn't seem to understand the fickleness of man - his ideas become meaningless. If he could have complete control of money inside a vacuum he might even be able to tweak his grand experiment and make it work. But the real world doesn't work that way. You have to have ideas that are plausible by standards of our political system - and each world economic heavy weight has their own differing politics. And more important you have to understand the role people play. They move in sync. If they all get over leveraged together because of great times - they also pull in their horns together to pay down that over leveraged debt. What did I say was the only way out of our current mess? Time. So after significant time deleveraging will start to kick in; the stuff people bought during the height of the building (houses, cars) will start to age and need to be replaced. But good gosh John, common sense says that if you have borrowed too much and everyone has a new house and you have too many houses - you're not going to convince people to go further into debt no matter how hard you try to stimulate in an effort to get them to buy yet a bigger house. You can't force people to take money and THAT is why interest rates are near zero. Krugman doesn't get that even with all his awards and education. .........I appreciate your loyalty and defense of him though.

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